BRUSSELS - The EU will unveil plans on Tuesday for key changes in Britain's membership, including a "red card" system for parliaments to block laws made by Brussels, in a bid to prevent Britain becoming the first country to leave the bloc.
British Prime Minister David Cameron (R) greets European Council President Donald Tusk outside No 10 Downing Street
Both sides have trumpeted "progress" following talks between EU President Donald Tusk and Prime Minister David Cameron at the weekend.
The EU president, who is keen to avoid a so-called "Brexit", warned however there were still "outstanding issues" to resolve.
A deal is far from done, with Cameron first having to persuade his fellow 27 EU leaders to back the reform proposals at a leaders' summit in Brussels on February 18-19.
If he gets an agreement, he will then campaign for Britain to remain in the EU in an in-out referendum that is likely to be held in June.
London's bid to transform its EU membership has sparked turmoil, coming as the alliance struggles with the biggest influx of migrants since World War II and the fallout from the eurozone debt crisis.
Former Polish prime minister Tusk is due to send the plans to EU leaders on Tuesday morning before releasing them publicly at 1100 GMT, EU officials said.
"Tomorrow around noon I will table proposal for a new settlement for #UKinEU. Good progress last 24 hours but still outstanding issues," Tusk wrote on Twitter on Monday night.
- 'Red card' system -
A source in Cameron's Downing Street office said "progress has been made", adding: "A period of intense negotiation will then begin with all the other member states with the aim of securing their support for all the ambitious proposals."
Tusk's draft contained a "red card" system that would allow a group of 55 percent of the EU's national parliaments to stop or change EU laws, which was one of Cameron's goals, the source said.
The EU's current "yellow card" system -- using a term taken from football disciplinary infractions -- only allows parliaments to demand an explanation of laws from Brussels.
London has previously warned that there is "more hard work" to do before any summit deal is possible on the four broad policy areas in which Cameron wants reforms.
The demands include safeguarding EU countries like Britain that are not part of the euro single currency, ensuring greater EU economic competitiveness and opting out of the goal of ever closer union.
But the most controversial reform involves restricting access to benefits for EU workers in Britain, an issue that has angered central European states in particular.
Cameron's office has hailed "substantial" signals from the European Commission on a deal for a so-called "welfare brake" that would allow London to exclude EU migrants from benefits, such as income top-ups for low-paid workers, if it can show its welfare system is under threat.
- Central Europe concerns -
The so-called Visegrad Four -- the central European states of Poland, the Czech Republic, Hungary and Slovakia -- say they will not accept any plan that discriminates against hundreds of thousands of their citizens working in Britain.
France meanwhile has set a red line by warning London that it would block the proposal on protection for non-euro countries if it went too far.
Although Cameron has only set a deadline of the end of 2017 to hold the in-out EU referendum and insists he is in "no hurry" for a deal, sources have said he is keen to push a vote through by June.
British media reported Monday night that June 23 was the most likely date.
That would avoid any new flare-up in Europe's migration crisis this summer and before British eurosceptics, particularly in Cameron's own Conservative Party, become even more unruly.
The next EU summit is in March but that would likely be too late to arrange a June referendum, with the next feasible date in the British electoral calendar coming in September after the summer holidays.
Opinion polls are largely split on whether Britons would vote to leave the EU.
It will be the British public's first vote on the country's EU membership since 1975, two years after it joined what was then the European Economic Community.